3 Important Reasons For Small Business Owners To Have Workers Compensation Insurance
Are you the owner of a small business? Are you thinking of expanding and hiring a few more employees? Expansion obviously comes with additional costs and overhead that must be figured in before you can properly decide whether or not expansion is possible at this time or if you must alter your plans at all. One cost that can be easy to forget is that of workers compensation. This may be something that you haven't had to worry about before but that you'll now have to deal with. Although it may be tempting to simply continue as you have been, there are a few things that you should know.
Legally required: It's easy for small business owners to temporarily forget that they might ever need to pay for workers compensation insurance since, in many states, you're exempt if you have fewer than 5 employees. But many states do require workers compensation insurance, even if all you have is one employee working for you. Although the penalties for not having this type of insurance can vary from state to state, you probably don't want to risk finding out directly what they are.
Relatively inexpensive: If an employee happens to get injured while at work, whether as a direct result of his or her job or not, he or she could then sue you or your company for compensation. This could result in your company owing the employee thousands—possibly even hundreds of thousands—of dollars in compensation. If this were to happen, your company would most likely be ruined and forced into bankruptcy. Fortunately, workers compensation insurance can prevent this eventuality. At a price of just a few dollars per month per employee, you'll be protected from most lawsuits directed at your company by an employee.
Attract more employees: In certain states, workers compensation insurance either isn't required at all or certain businesses can file for a waver to exempt them from needing to purchase the insurance. This sounds good for your bottom line, at least initially. But consider if you were the employee. Would you want to go to work for an employer who may not be able to compensate you in the event of a workplace incident? While some employees would work for anyone, the best employees are going to look for the best benefits. As a small business, you're not going to be able to offer the elaborate bonuses and huge vacation times that larger companies may be able to offer. Having workers compensation, even when it's not actually a legal requirement for you to do so, is one way to show employees that you care about their well-being, helping to attract and to keep more experienced and reliable workers that will be better at pushing your business to the next level.
To learn more about workers compensation insurance, contact an insurance agency like Brown & Brown of Prescott.